The High Stakes of Investing in SpaceX

Observing SpaceX’s stock performance since its emergence as a public company brings to mind the spectacle of a successful rocket launch. The upward trajectory of its share prices has been remarkable.

The company has achieved superlative milestones: it conducted the largest initial public offering ever, making its founder, Elon Musk, the first trillionaire. By Thursday, SpaceX’s market value reached about $2.4 trillion. At certain points during the week, it ranked behind only Nvidia, Alphabet (Google), and Apple in terms of market capitalization. Despite a couple of difficult days, it maintains a position within the top 10 stocks, denoting a place among an elite group.

However, the question arises—does SpaceX truly deserve such valuation? Are its shares justifiably worth such a high price?

While Elon Musk is indeed a visionary with significant achievements in both Tesla and SpaceX, which supports high share prices according to his numerous followers, the current valuation of SpaceX is difficult to comprehend using traditional analysis tools. The company is not currently profitable, which is only part of the issue.

The most concerning aspect is that investing in SpaceX is akin to risking resources on a science-fiction dream. The company’s prospectus specifies its dedication to establishing a permanent human colony on Mars, consisting of at least one million people.

This goal isn’t just a fancy notion. Elon Musk has expressed, with substantial detail, a firm commitment to transforming humanity into an interplanetary species.

Pursuing this mission could divert any potential profits SpaceX might generate. Even with immense success in every other domain, the Mars mission has the potential to financially drain the company.